Search Vs. Social: A Game Over Before it Started

Game over
I really like GigaOm but they fell prey yesterday at the end of a piece that was for the most part accurate about Search not being a demand-gen channel to the false prophet of Social Media advertising overtaking Search. They’re in good company underestimating the upside of Search. In 2003 Jupiter predicted paid search would grow to $4.3 billion in revenues by 2008. The actual figure was $12 billion. In 2010 the worldwide market for Search ads is estimated to be $25 billion – a number that far eclipses even the most bullish estimates of 5 years ago.

From the GigaOm piece:

"Google needs to be afraid of social and what it implies…. Google needs to find ways of incorporating the social element into what it does, or risk losing attention — and by extension, potential revenue."

Outside of gaming Social is maybe doing $2B a year in ad revenue. Google will do $20B this year… just in owned Search. That's too big a delta to be "afraid" of anything.

There’s no denying that Social data is an important layer. It could potentially become the most important data layer – possibly orders of magnitude more important than the pages and link data Google predominantly uses now to power its algos. But we’re a long way from that happening.

As I mentioned in late 2009 in a piece titled Waiting to Rule the Ad World: The Next Decade Will Shift to Search the future of Search monetization is secure and enormous.

"Direct mail (already data driven) is expected to decline 39% in the next five years – from $49.7 billion in annual spend in 2008 to $29.8 billion and will shift to search. Radio dollars (half local, half national) have not even moved into Search en masse. Then there are the remaining dollars from Newspapers. Looked at a circular lately? Mobile search also has billions more in untapped potential. All these dollars hit search in the coming decade."

Got upside?

  • YouTube is now over 25% of Google’s Search queries and for two years has stood as the 2nd largest Search Engine. It is just figuring out its revenue model.
  • Mobile Search is predicted to be $5B for Google in just 2 years
  • Maps/LBS/Local Search…is a market that might be $100B worldwide once it is fully captured. Local Search alone has been growing at double digits every year…for the past 8 years.

The biggest diamond of all might be the hardest to mine. There has been little to no cross-media integration between the most powerful demand generation channel TV with the most effective demand capture channel Search. Once those silos breakdown and Advertisers truly optimize cross-media we might be looking at another $50-$75B in market potential.

Still, Google has not been sitting on the sidelines with Social. The best presentation on the challenges in Social Media…dare I say ever… is from Google a few months ago. A year ago Google began experimenting with Social Search. 150 million people are active on its primary Social Network, Gmail.

As I’ve said many times in the past Search is not a channel. Search is a behavior. Our appetite for this behavior and the ability for technology to deliver against it is hardly a decade old. Unless humans get rewired or technology stops advancing there is no end in sight to the growing value of Search to people and thus the revenues and returns associated with it for Advertisers.




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6 responses to “Search Vs. Social: A Game Over Before it Started”

  1. Mohan Arun L. Avatar

    After reading this
    From the GigaOm piece:
    “Google needs to be afraid of social and what it implies…. Google needs to find ways of incorporating the social element into what it does, or risk losing attention — and by extension, potential revenue.”
    I conclude that GigaOm has lost their minds.
    Even Google got it wrong with their idea of including ‘social circle’ in search results.
    This is how anything labeled ‘social search’ should be:
    “All searches should start non-socially or anonymously, then the searcher can optionally include the social element in it and close his search for now, if he hasnt found what he is looking for and further with an option to keep his search query ‘open’ and visible to friends to receve further suggestions from friends and the world on that topic.”
    That all searches start non-socially vindicates the need for including social circle in search results. Most people dont have the contacts or ‘social circle’ that would be able to answer their query, that is why they are coming to the search engine in the first place.
    Per GigaOm’s idea, Google should be scared if all my friends are in web development segment and Google has not yet integrated them into my search results for ‘advanced integral calculus’.


  2. Scott Rafer Avatar

    Quoting big numbers doesn’t create credibility. You might as well have written this in 2003 saying, “Look how small search is!”
    Yes, search is the biggest thing running right now and it grew faster than anything before it. You have no way of knowing whether or not Social is going to be even bigger (or not) or grow even faster (or not). The only thing we know is that — if social does go even crazier than search — marketers are doing the same damn dumb thing of blindly handing their businesses over to FB as they did to Google.


  3. Jonathan Mendez Avatar

    Scott- what we do know is that social advertising is two years old and is basically available in a single channel (FB). Two years into paid search we had many more channesl (4 major – Google, Yahoo, MSN & Ask plus the secondary channels) and may more advertisers. It was not marketers that blindly handed their money over to Google. They did so because Google had the best volume. If MSN was able to acquire more volume back then *every* advertisers would have paid for it. It may that this lack of competition will be what holds Social back as a channel.


  4. Corporate Logo Design Avatar

    Google should use orkut as its base of adword.
    Facebook has its own ppc platform, now they have added bing as their search engine. So why not google use orkut just like what facebook does.
    Orkut will be having google search engine for indexing.


  5. ian Avatar

    Hi there, I was just passing by and i got this story nice, I enjoyed reading it.
    I am inspired by your hard work, keep up the great job.


  6. wholesale designer clothing Avatar

    “Google needs to be afraid of social and what it implies…. Google needs to find ways of incorporating the social element into what it does, or risk losing attention — and by extension, potential revenue.” ah,ha, I love this sentence. Tks


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